Correlation Between Plaza Retail and Inventrust Properties

Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Inventrust Properties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Plaza Retail and Inventrust Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Plaza Retail REIT and Inventrust Properties Corp, you can compare the effects of market volatilities on Plaza Retail and Inventrust Properties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Plaza Retail with a short position of Inventrust Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Inventrust Properties.

Diversification Opportunities for Plaza Retail and Inventrust Properties

-0.76

Correlation Coefficient

Plaza Retail  Inventrust Properties

Pay attention - limited upside

The 3 months correlation between Plaza and Inventrust is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Inventrust Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventrust Properties and Plaza Retail is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Plaza Retail REIT are associated (or correlated) with Inventrust Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventrust Properties has no effect on the direction of Plaza Retail i.e., Plaza Retail and Inventrust Properties go up and down completely randomly.

Pair Corralation between Plaza Retail and Inventrust Properties

Assuming the 90 days horizon Plaza Retail REIT is expected to under-perform the Inventrust Properties. But the pink sheet apears to be less risky and, when comparing its historical volatility, Plaza Retail REIT is 1.34 times less risky than Inventrust Properties. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Inventrust Properties Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,956  in Inventrust Properties Corp on September 14, 2024 and sell it today you would earn a total of  133.00  from holding Inventrust Properties Corp or generate 4.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Plaza Retail REIT  vs.  Inventrust Properties Corp

Plaza Retail REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plaza Retail REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Plaza Retail is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Inventrust Properties

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inventrust Properties Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inventrust Properties is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Plaza Retail and Inventrust Properties

The main advantage of trading using opposite Plaza Retail and Inventrust Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, Inventrust Properties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Inventrust Properties will offset losses from the drop in Inventrust Properties' long position.

The idea behind Plaza Retail REIT and Inventrust Properties Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.